Govt To Disburse Subsidy Dues To Ola, Ather, Hero & TVS Under FAME-II

The Ministry of Heavy Industries, the nodal government agency handling the Faster Adoption of Manufacturing of Electric Vehicle (FAME)-II scheme, has been mulling returning the due subsidies of four major electric two-wheeler companies, reports claimed. 

The move comes days after these EV players announced reimbursing the EV customers to whom these companies sold EV chargers and related software on additional payments beyond the ex-showroom price of the electric two-wheeler. 

As per some reports, the ministry might release a cumulative Rs 500 crore subsidy to the four two-wheeler EV companies-Ola Electric, Ather, TVS, and HeroCorp. The ministry earlier had found these allegedly errant firms selling some of the components of the EV unbundled on extra payment and claiming their ex-showroom price of up to Rs 1.5 lakh (the highest amount eligible for subsidies). As a result, it enabled many of these firms to claim subsidies under FAME-II. 

Ola will likely have the lion’s share out of this Rs 500 crore. It is likely to get Rs 370 crore from the ministry. It is followed by Ather, which is expected to get Rs 275 crore. Meanwhile, TVS may get Rs 150 crore. At the same time, Hero MotoCorp can see around Rs 28-Rs30 crore pouring into their bank accounts.

Earlier, the ministry had halted the disbursement of subsidies under FAME-II to EV players mainly due to two prime reasons. First, some EV players defied the norms of FAME-II and used imported parts of EV manufacturing against the prescribed limits. 

On the other hand, some of the two-wheeler EV players like Ola, Hero, Ather, and TVs sold EV chargers and related software to them in addition to the ex-showroom price of the two-wheelers. As the scheme guidelines had set a ceiling of Rs 1.5 lakh to get the subsidies, the sales of unbundled items irked the ministry after it was reported to the ministry by a whistleblower.  

However, after some of the two-wheeler EVs announced the move to reimburse the customers for the unbundled components sold beyond the ex-showroom price, the ministry decided to make the pending subsidy dues.